TAMPA — Despite dire predictions of costs set to climb in coming months, gasoline prices may drop 5-10 cents in the near future, thanks to falling oil carprices.
The oil market suffered a “mini collapse” recently, following reports of a record build in domestic crude oil, said Mark Jenkins, spokesman for AAA – The Auto Club Group. “This will postpone the customary spring time gas price spike.”
Crude oil had held steady at approximately $53 a barrel. Prices hit that mark on Nov. 30 when OPEC cut production by approximately 1.2 million barrels per day, in hopes of reducing the global surplus. However, U.S.-based wells have ramped up production 1.6 percent since the beginning of the year. Crude inventories climbed 9 percent, reached a new all-time high four weeks ago and have grown every week since.
Despite OPEC’s efforts to balance the market, traders were reminded this week that the global glut in oil still lingers, Jenkins said recently. “Although it could take several weeks, analysts believe oil prices could recover by the time OPEC meets again in May.”
By that time, refineries will have rising demand as they pump summer-blend gasoline into the market. Those factors could push pump prices 20-40 cents higher by Memorial Day, Jenkins said.